Speaker: Chris Gill, CEO & President, SVASE
Panelists: Chris Horn, Founder & Chairman, IONA Technologies
Shay Garvey, Partner, Delta Partners
Damien Eastwood, Angel Investor, Xcellangels
Presentation by Chris:
Formula for Success
- Team (50% of value)
- Idea (20% of value)
- Plan (30% of value)
Team Roles - usually there are 3
- Visionary/CEO
- Engineering/CTO
- Sales & Marketing/CMO
Team
- Great people more important than great ideas
- Individual entreprenuers rarely funded
- Profile of a great team
- Typically from the industry
- Worked together in the past
- Diverse skill set
- Track record (results beat MBA!)
- Recognise someone as the CEO
(quote from Guy Kawasaki - engineers add $250k each to the valuation, MBA's take off $500k)
The CEO
- Responsible for delivering the plan
- Understand that action is the formula for success
- inexperience flounders founders!
- Stumbling blocks
- Blind loyalty
- Tactical focus
- Single minded vision
- Working in isolation
- Better to step aside than being fired!
Customer Traction
- Get paying reference customers - these are leverage to attract volume customers and VC's
- How do you scale to break even?
- Scale to indirect sales - you cannot use a direct sales force (more of a B2B comment I guess!)
- How do you position for managing global sales?
Diane asked Chris Horn - is it true that people are more important and if so how does an inexperienced person make themselves successful? Chris said that the opportunity is for the absence of physical space is an opportunity - one of the start-ups he is involved in collaborate virtually. So part of the answer is to partner up globally and so find more experienced people.
Damien agreed with the people comment. He has invested in inexperienced people - he gave $500k to someone 4 years ago and will get a 10x return from that. Damien knew him and had confidence that he would perform. An inexperienced person should partner up with someone experienced, or should be partnered up by the investors.
He completely agreed that tech business are very prone to working in isolation - it is a big problem.
Shay said they look at technology, management and market. The reason companies fail is because of management, the reason companies succeed is more likely to be market influenced. The 10 best successes of their first 50 investments were not necessarily the ones with the best teams. The luckiest guy is preferably to the smartest!
Frank Hannigan asked about the defining characteristic of the leaders they have invested in. Shay likes sailors - people who have captained the boat (big D4 thing going on here!!!). However he is equally conscious of the market. Half of their portfolio exit CEO's were not the foundering entrepreneurs.
Q asking about the hot sectors. Shay responded that the returns going fdrward are going to aggregate in the top 10%. Web2 is interesting, MedTech is good. Chris Gill said that he is not good at looking forward. However they see money going into medical, environmental has peaked, software is still good. Web2 is a problem for VC's - they do not understand the dynamics! Nobody knows which ones are going to work - not the founders, not the VC's.
Chris Horne said that he likes SAAS and software component distribution. He is also doing a lot in the extreme wireless frequency space - "trading" spectrum chunks on demand!
Damien likes medical devices, he knows people who are investing in nanotechnology (but long term punts)
keith
Nice summation of the event Keith - was that you tapping loudly on the Keyboard during the talk then? ;-)
Good to catch all the names - it was hard to as they were being introduced.
Posted by: Shane Mc Allister | March 05, 2008 at 12:07
> was that you tapping loudly on the Keyboard
It May Have Been :-). Thanks for commenting Shane.
keith
Posted by: keith bohanna | March 05, 2008 at 12:25